Overcome some barriers and have covered the five most crucial money conversations every couple must have!
1. The retirement talk
We all know that planning for retirement is necessary, but have you talked about what retirement means to you? Are you on the same page when it comes to the where, when, and how of retirement, such as where you’ll live, when you’ll retire, and how you’ll spend your time? This conversation is critical to making sure you are setting enough money aside for the kind of retirement lifestyle you want to have.
Your opening line: “Tell me what you think our retirement will be like.”
2. The savings talk
When it comes to how much money you should have in liquid savings, many financial experts will quote between three and 12 months’ worth of expenses. Depending on your family circumstances, especially if you are currently living on one income, the actual amount your partner wants to have in savings might be very different than these guidelines.
Your opening line: “How much money do we have to have in savings for you to feel secure?”
3. The debt talk, part 1
Most families have some debt, whether it is a mortgage, student loans, a car loan, credit cards, or some combination of all of the above. Determine your respective comfort levels with debt. Is some amount of debt an inevitable part of life or is debt something to be paid off as aggressively as possible? In order to have this conversation, you must first make sure you are both aware of your current debt levels so that you can make sure you have concrete numbers in mind.
Your opening line: “Do you think our current debt level is a problem?”
4. The debt talk, part 2
Assuming that you have more than one type of debt and that you’d both like to make progress toward paying it off, your next step is to determine which debts to target first and how aggressively to work toward paying them down. For instance, are you willing to live on rice and beans to save money? Or do you still need some money for fun?
Your opening line: “Which of our debts bothers you most?”
5. The kids and money talk
As your children get older, you’ll want to make sure you are on the same page in terms of expectations of financial support. Will you pay for college? Will you provide support for things like car insurance and cell phone bills in high school, college, and beyond? Is there an age or stage when kids should get “cut off”? Having clarity on these issues will help you and your spouse set realistic expectations for your kids when the time comes.
Your opening line: “What kind of expenses do you think are reasonable for us to cover as the kids get older?”
These conversations shouldn’t be considered “one and done.” You’ll want to revisit these topics as your life or income levels change. Keep that in mind :)